This document discusses the importance of continued investment in water efficiency measures. It notes that major Australian cities achieved 350GL of annual water savings through efficiency measures implemented during droughts from 2001-2010. Maintaining these measures is important given uncertainties around climate and population changes. The document advocates for a portfolio of long-term efficiency programs and policies like regulations, pricing, and engaging customers. It argues efficiency should be viewed as equally important as infrastructure for ensuring reliable water supplies.

1. “Using less, paying more”
Making the case for long term investment in water efficiency
Cilla de Lacy
Manager Liveable Communities
WSAA
June 2013
The Water Services Association of Australia is
the industry body that supports the Australian
Urban Water Industry

2. Using water wisely – now and forever
Maintaining investment in water efficiency is
as important as maintaining investment in
your infrastructure – particularly in the face
of uncertainty!

3. The decade that
was
• Millennium drought
(2001-2010)
• Record floods (2011- 2013)
GLOBAL FINANCIAL CRISIS 2008 – the worst
since the Great Depression

4. Responses!
• Big investment in
desalination, 0GL to
500GL from 2005 to
2012
• 130% increase in
recycled water
supplied from 2000
to 2009
• Big savings in water
use – 350GL/yr!

5. The 350GL – where and how?
City Annual water
savings (GL)
Sydney 120
Perth 100
Melbourne 60
Adelaide 55
Canberra 25

6. Impact on demand
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
Dec-02
Jun-03
Dec-03
Jun-04
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
%Full
SystemStorage(GL)
Melbourne's storage volume 2002-2011
Estimated Storage Volume without Water Conservation Recorded Storage Volume
The percentages shown are based on a storage capacity of 1810.5GL including Tarago Reservoir.

7. Impact on demand

8. The perfect storm
Quick increase in
cost and prices
Eastern Australia
has flooded
Water use is
down due to
floods and
behaviour
change
Revenues are
down but big
fixed costs to
recover
Climate
change is
making
many
extreme
events
worse
Electricity
prices are
also high
and
economic
growth is
very low

9. The 2030 Vision
Stewardship of the
urban water cycle
Influencing strategic land
use planning
Compelling voice on National
issues
Efficient, trusted and valued
‘Customer
driven,
enriching
life’

10. The strategy for water efficiency
Customer
driven,
enriching life
Urban
water
security
Regulation
Innovation
Water-
energy
Strategic
land use
planning

11. ‘Customer driven, enriching life’
• A recent SAWM Newspoll found that 96% of
people surveyed saved water around the home
• About 70% of Melburnians and 55% of
Sydneysiders support continuing investment in
water efficiency despite recent price rises and
capital investment
• Households now prefer low level restrictions
(permanent water efficiency measures) to no
restrictions - but are willing to pay more now to
avoid severe restrictions

12. Urban water security
Managing
future supply
reliability with
future demand

13. Water efficiency and the supply-demand balance
• Set a long term
reduction
target with the
community
Target
• Develop, cost
and assess a
suite of water
efficiency
programs
Programs • Continuously
invest in the
right water
efficiency
measures
Investment
• Publically
communicate
demand-supply
balance every
year and act
accordingly
Communicate

14. Save water, save energy!
• Peak demand for energy in the residential sector driven by air
conditioning, water heating, pool pumps and filters
• Switching to water-saving showerheads in high water using
households may reduce energy bills by up to 47 percent!
• Education programs designed to highlight link between energy and
water use in a household and communities are important

15. Regulation - water restrictions
• Outdoor water restrictions helped save 575GL of water in Sydney
between 2003-2009. In Melbourne per capita use fell from 195L/day
to 143L/day
• Significant savings made inside the home but a loss of green spaces
affected liveability
• Aggregate welfare cost of water restrictions to Australian households
estimated to be $900m (PC 2008)
Temporary water restrictions are not a water efficiency
measure as they result in a ‘loss of utility.’ WSAA
supports the use of permanent water efficiency
measures with severe water restrictions reserved only
for emergencies

16. Economic regulation
• Customers may expect water prices to fall when water use
efficiency has increased.
• A decrease in water demand will reduce revenue but only
have a marginal effect on short term variable costs such as
pumping and treatment.
• As more than 60 per cent of revenue is typically
associated with fixed capital costs, short term changes in
water demand are unlikely to significantly affect the
revenue requirement.
• This imbalance between revenue and costs may require a
short term increase in prices, which should reduce over
time as capital costs are avoided or deferred.
There may be merit in including water conservation costs in
recoverable revenue only when conservation is the lowest cost
solution for managing demand and supply; that is it must be
lower than the cost of augmenting water infrastructure or
alternative sources of supply (ESC, 2012)

17. Pricing
• Increasing water usage prices by 10% decreases
demand over a year by 1.1%
• Upgrading of appliances = halving of long term price
elasticity
• Predicted increases in housing units, smaller block
sizes and use of efficient appliances will reduce the
ability of water usage prices to impact residential
demand

18. Building and appliance regulation
New homes
BASIX (Building Sustainability
Index) - Energy and water bill
savings for an average four bed
home in Western Sydney are
between $158 and $228/yr
(NSW Government, Planning 2012)
Appliances
The Water Efficiency Labelling
and Standards Scheme has
generated water savings at a
cost of $0.08kL to $0.21kL.
(ISF, 2008)
What’s missing?
Minimum standards for commercial
buildings
What should they target?
The prevention and elimination of leaks as
94% of water consumed in an office block is
through leakage and from heat rejection
equipment particularly cooling towers

19. Strategic land use planning
A strategic approach to urban water and land use
planning keeps open the maximum number of options
for servicing a community
Engaging with
communities
upfront
Influencing
public policy
debate
concerning
liveability
Valuing social
and ecosystem
services

20. Innovation! Know your customers!
Always
Good sewage service and
safe clean drinking water
- good taste and look
Fix and maintain
infrastructure
Sometimes
Provide water usage info
and comparisons
Sell water related
products and recycled
water
Mostly
Set customer water use
targets and provide
water management
advice
Proactive leak detection
and protection of
waterways
Don’t expect
Customer data to go to a
third party
Utilities to diversify into
new markets for profit

21. Customer segments
16%
Efficient
usage
18% Price
control
18% Uninvolved
22% Future focus
26% Basic supply and maintenance
Yarra Valley
Water ‘Tap
App’ Perth
H2omeSmart
program

22. Summing up…….
It’s all about services NOT products
We are in the ‘forever’ business
Maintaining investment in water efficiency is as
important as maintaining investment in your
infrastructure – particularly in the face of
uncertainty!
It just takes a mindset change and a bit of
imagination

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